Unclaimed life insurance
If you've changed address, spent time overseas or haven't updated your details with a financial institution, you might have unclaimed life insurance. Find and claim back your money in 4 easy steps.
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Australia has an estimated $1.5 billion in money that's yet to be claimed from bank accounts, shares, investments and life insurance policies, according to Australian Securities & Investments Commission (ASIC). A large reason for this is that the person who took out the policy usually isn't the one to make the claim. Luckily, you can find out if you have unclaimed life insurance through ASIC in minutes.
🔎 How do you find unclaimed life insurance policies?
If you think you may be owed money from unclaimed life insurance or a lost life insurance policy, the first step is to make a search on the ASIC unclaimed money register. ASIC is the organisation that holds these funds until the rightful owners claim them. If you find your name or the name of a family member, there might be money you can claim.
To claim life insurance payouts you need to contact the insurer, the policyholder you held cover with – you should be able to get their contact details from ASIC. The insurer will then contact ASIC, which will give them the funds to pass on to you.
Two names will generally be listed on the life insurance policy. One is the person whose life is insured and the other is the policy owner. In most cases, these will be the same person. However, if they differ, the unclaimed life insurance payout can only be claimed by the policy owner, unless the life insured can prove otherwise.
🕒 How long does unclaimed life insurance take to pay out?
Generally, you can expect the unclaimed life insurance payout process to take around a month. Here are the 4 main steps to making a claim and how long they generally take.
- Do an unclaimed life insurance search. It generally only takes a few minutes to run a search for unclaimed life insurance payouts online. If you find you're owed money, make sure you note down your Original Transaction Number (OTN) – you'll need this to claim.
- Find and contact the insurer. You can use ASIC's A-Z list of life insurance companies to find the life insurance company your money is with. Once you've found the insurer, get in touch with them.
- Begin the claims process. The insurer will tell you what documents you need to give them.
- Wait for the insurer to process your claim. After that it will typically take around 28 days for ASIC to release the funds to the insurer and the insurer will then release the funds to you.
What happens to unclaimed life insurance money?
Life insurance companies need to report unclaimed money to ASIC every year. When nobody claims the benefit, ASIC transfers the funds to the Commonwealth of Australia Consolidated Revenue Fund and puts together a report so if someone does come looking for the payout, it's easy and available to find on the government's unclaimed money search tool.
Life insurance becomes "unclaimed" if it hasn't been paid out for 7 years after the policy becomes payable. This is usually when the person who is insured passes away or becomes terminally ill.
Why does life insurance go unclaimed?
Unclaimed life insurance can happen for several reasons. Some of the most common include:
- The beneficiary of the policy might be unaware that there is a policy in place and simply hasn't got in touch with the insurer to submit a claim.
- Someone might hold a life insurance policy in superannuation without knowing it, and the people close to them don't realise that they're entitled to a payout.
- The immediate beneficiaries may also have died, in which case the money needs to be passed on further. Tracking down the rightful inheritors can take time.
- It's common for people to travel or move after the death of a loved one, which can make it harder for insurers to track down beneficiaries.
Do I get interest on unclaimed life insurance?
Yes. Since 2013, the federal government has paid interest on unclaimed life insurance money held by ASIC. The interest rate changes every year so the amount you'll receive will depend on how long it's been unclaimed for and ASIC's regulations. No interest is payable before 1 July 2013.
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